All Forum Posts by: William C.

What if he has all the money? Haha. I must convince him.

I find it amazing how many people say we paid too much for the property when they have no idea how much we paid. We basically got robbed by the contractor and everyone wants to focus on the purchase. I appreciate the input, I really do. I posed the question the way I did so I could get candid answers. We purchased at 40% of ARV, so the 50% of ARV rule wouldn't have helped me here. The point is how do I convey to my partner that cheap labor doesn't equal big profits? I know what we did wrong, how do I show my partner that $20k profit after 11 months isn't all that great?

I don't follow your logic Greg S. ? I would agree there was an opportunity cost for it taking 11 months, but I don't see how we "lost" money. Assuming there was another deal, or 4, then it's easy to say we could have made more. But if the $100k sat in the bank for those 11 months we would have earned what, $50 in interest? So yes, we lost opportunity cost, but it's impossible to quantify that without having an actual deal in front of me that I could not partake in due to being tied up in the other deal.

Greg S. I like that approach, although I see rates rising from here on out, but just a hunch. Close to none after the refi. Plus the principal paydown will be slow after the loan resets. But I see your point.

What part of PA are you taking about?

Something isn't right. Iv seen this done before with 3.5%. I don't know all the specifics so I can't so where it went wrong, but feel free to reach out to me if you still need help. There are also other loan products available that require even less than FHA.

To clarify it wasn't the 11 months that allowed the market to appreciate, I feel we could have sold for about the same had it taken 1 month. I guess what I mean is the marker was very hot and it was a great neighborhood with very little inventory at the time it sold so it sold fast and for full asking , which was about $20k more than I expected when we bought. I was also being conservative when we bought. I don't know that we could have gotten it cheaper, my market is competitive, and it was a good deal that could have been great. I think we did well on the buy side. I know for sure the issue was in the construction. I struggle to articulate to my partner that this one man band handyman is holding us back. I totally understand the value in paying a little more but finishing on time and on budget. I'm happy to say we will be using a different method moving forward. Thank for the responses, I love getting the different points of view. Lastly, it wasn't our first project, but it was one of our first, and to be honest a $20k profit isn't too bad given the circumstances and experience gained. I should also mention as the agent I earned a small commission on each side so the true profit was more like $26k.

Tim Chapman great point, and we definitely saw that when we were in escrow. It was very tough at the time to delay settlement another 45 days though just to avoid capital gains tax. We were happy to just sell and cash out so we could move onto the next one.

It's in an A- Neighborhood.

Jus to clarify, we bought a triplex and renovated it, raised the rents and raised the value. If we were to sell we would net nearly $40k, if we hold we net $1000 a month after all expenses, and capex and management. I would reinvest the $40k, although I don't necessarily need it because we can refi and cash out basically using the BRRR strategy. So with all that said we can continue to do more deals like this no matter the route we take, it's a matter of lump sum profit or slow profit. Obviously other benefits come with holding, like principal pay down, and possible appreciating. as do other headaches and risk.